Poverty Rises With Wealth in Indonesia

Rising numbers of Indonesians are unable to grow out of homes such as this one on the riverbank of Ciliwung in South Jakarta. Credit: Alexandra Di Stefano Pironti/IPS.

JAKARTA, Jun 29 2012 (IPS) - If in the words of Gandhi ”poverty is the worst form of violence,” then the Indonesian government is accountable to some 120 million citizens who live on less than two dollars a day.

Living without basic necessities like clean water, proper nutrition, healthcare, education, clothing and shelter, 29-year-old Parwan fits the dictionary definition of absolute poverty. But not that of the Indonesian government, which sets the poverty line at 7,800 rupiah (about 86 U.S. cents) per day – less than half that of the World Bank, which defines poverty in Indonesia as living on less than two dollars a day.

In the south Jakarta slum of Ciliwung that stretches along a fetid river bank, Parwan survives in a one-room shack shared with his wife and baby girl. He supports his family on a little more than 700,000 rupiah a month (75 dollars) which places him just above the government’s poverty line.

But he and tens of millions like him – in a country of 240 million which boasts Southeast Asia’s largest and fastest growing economy – are unlikely to get a helping hand from authorities who do not even acknowledge their poverty.

“Our National Poverty line since September 2011 is 243,729 rupiah per capita per month (25.76 dollars or 0.86 cents a day),” welfare ministry spokesman Tito Setiavan told IPS.

That neat bit of arithmetic has wiped out tens of millions of poor from the slate: according to government statistics from September 2011 about 30 million people – or 12 percent of the population – lives below the poverty line. The World Bank contends that half the population lives on less than two dollars a day, in line with the Asian Development Bank.

Binny Buchori, senior adviser for The Centre for Welfare Studies in Indonesia, told IPS that frequent government claims that poverty is in decline does not take into account people living on the very margins of the poverty line.

“Whenever prices rise many more people fall in the category of the poor,” said Buchori.

In a country where rice – the must-have staple of the Indonesian diet – costs the equivalent of 85 U.S. cents per kilo, even this basic commodity is out of reach of the myriad poor. A cheapest meal of rice egg and vegetable at a roadside food stall, or warung, costs 10,000 rupiah (one dollar).

“Many low income workers in Indonesia are only able to eat once per day. They will have fried banana for breakfast and a simple meal of noodles for lunch and maybe another banana for dinner,” said Buchori.

Indonesia’s malnutrition has resulted in moderate to severe stunting in 40 percent of children under age five, according to a report by the Save the Children.

While expensive shopping malls, luxury cars and high rise buildings are mushrooming in the country, slums and beggars seem growing as fast.

“Wealth and poverty are both on the rise. The challenge is the distribution of wealth and one way is paying taxes, but there is no will on the part of the government to implement it,” said Buchori.

Education, the magic road out of poverty for many around the world, is often a dead end in Indonesia.

“Education is free but parents still have to pay for uniforms, books, transport to the school and in many cases also bribes to the school to have their children admitted,” said Buchori.

“We realize that moral hazard problems such as corruption are our number one development threat,” said government spokesman Setiavan.

Indonesia has a 95 percent enrolment in primary school, but that drops to only 58 percent when pupils reach secondary education, according to government statistics.

“There are many drop-outs from high school and only 6 percent of the population completes university,” Buchori noted.

Abigail, a bright seven-year-old living in the Cipinang Elok neighbourhood of Jakarta and attending afternoon classes at humanitarian foundation that helps poor parents pay for school expenses, has big dreams of one day buying a car for her parents and sister, and maybe traveling abroad.

“I would like to become a doctor to cure my family when they are sick,” she said, her dark eyes beaming with confidence.

But despite her clear intelligence, Abigail’s propsects of realizing any of her dreams are doomed, according to Buchori.

“For a girl of this background with a situation of poverty at home there are not much prospects. Maybe she will finish secondary school but most probably after 15 she will drop out and may be forced to work in a factory or as a housemaid,” she said.

The Asian Development Bank says that Indonesia is the only country in Southeast Asia where poverty is on the rise, despite a 6 percent economic growth that has been attributed to domestic consumption among an expanding middle class.

The combined wealth of Indonesia’s 40 richest people is equivalent to that of about 60 million of its poorest citizens, or more than 10 percent of its GDP, according to recent statistics.

“Despite the rhetoric about middle classes contributing to growth in Indonesia, 82 percent of the population is living on less than four dollars a day, and they account for 58 percent of household consumption,” according to a report by Standard Chartered.

“The market has unjustly ignored the potential consumption growth of the poor over the next decade,” it said.